In early May, we talked about the Real Estate sector (XLRE). During April, this eclectic group beat out the other 10 S&P sectors, which is uncommon. Furthermore, the XLRE is up 23% in 2021, behind only Energy and Financials. How can this be? Aren't REITs dividend plays, susceptible to jumps in rates (as we saw in the first three months of the year)? Chartists tend to look the other way (ignore) when it comes to slower-growing, individual-dividend and sector plays. In some years (periods), that certainly is a mistake.

Precious metals continue to show signs of life, coming off their March 30 lows as the U.S. Dollar Index (USD) remains in an eight-week downtrend. The USD has given up all its gains off recent lows and is testing key chart support from the lows in January (near $89). Treasury yields have been flat, also helping the metals.

Stocks rose strongly on Monday morning, led by the Technology and Communication Services sectors, as investors awaited personal consumption data later in the week. The yield on the 10-year Treasury fell back to 1.6% while the dollar traded at a nearly 4-month low against other major currencies. The Dow rose 0.7%, the S&P 1.1%, and the Nasdaq 1.5%. Crude oil rose more than 2% to $65 per barrel, while gold rose $8 to $1885 per ounce.

Stocks rose on Thursday morning after three days of losses, led by the Technology and Consumer Discretionary sectors. On the employment front, the Labor Department said that first-time claims for state unemployment benefits fell to 444,000 for the week ended May 15, down from 478,000 a week earlier and slightly below the Bloomberg consensus of 450,000. The Dow rose 0.6%, the S&P 0.8%, and the Nasdaq 1.4%. Crude oil fell to $63 per barrel, while gold traded near $1879 per ounce.

Stocks were mixed on Tuesday morning following earnings reports from major retailers and new housing market data. Walmart shares rose 2% after the company reported better-than-expected 1Q sales and earnings and raised its full-year guidance. Macy's shares also rose following an unexpected first-quarter profit. The Commerce Department said that U.S. housing starts fell 9.5% to a seasonally adjusted annual rate of 1.569 million units in April, down from 1.733 million in March and below the Reuters consensus forecast of 1.71 million. The Dow fell 0.2%, the S&P was flat, and the Nasdaq rose 0.7%. Crude oil traded near $66 per barrel, while gold fell slightly to $1868 per ounce.

The stock market was volatile last week as inflation concerns whipsawed stocks, ultimately pushing them lower on the week. During Friday's session, the Dow Jones Industrial Average increased 361 points, or 1.06%. The S&P 500 was up 1.49%, and the Nasdaq Composite was up 2.32%. For the week, the DJIA was down 397 points, or 1.14%, the S&P 500 was down 1.39%, and the Nasdaq Composite was down 2.34%. Year-to-date, the DJIA is up 12.34%, the S&P 500 is up 11.12%, and the Nasdaq Composite is up 4.20%.

Stocks continued their recovery on Friday morning, despite weaker-than-expected April retail sales data. The Commerce Department reported that U.S. retail sales were unchanged last month following a 10.7% jump in March. The reading was below the consensus call for 1.0% growth. The Dow rose 0.8%, the S&P 1.1%, and the Nasdaq 1.6%. Crude oil traded near $65 per barrel, while gold rose $16 to $1840 per ounce.

Wednesday was another tough day for stocks, making it three in a row. The S&P 500 lost 2.2%, the Nasdaq fell 2.7%, the Nasdaq 100 (QQQ) gave up 2.6%, the S&P 400 was down 3.1%, the Russell 2000 lost 3.2%, and the Dow Industrials forfeited 2%. NYSE market breadth was ugly at -2,475.

Coming off March 30 lows, precious metals continue to show signs of life as the U.S. Dollar Index (USD) remains in a six-week downtrend. The USD has given up all its gains off recent lows and is testing key chart support from the lows in January and February, near $90. Treasury yields continue to trade sideways.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Stocks were mixed on Thursday morning following news that the Biden administration would support intellectual property waivers on coronavirus vaccines. Pfizer and Moderna shares were down sharply, though JNJ was flat. On the employment front, the Labor Department said that first-time claims for state unemployment benefits fell to 498,000 for the week ended May 1, down from 590,000 a week earlier and below the Bloomberg consensus of 538,000. The Dow rose 0.4%, the S&P rose 0.1%, and the Nasdaq fell 0.3%. Crude oil fell 1% to $65 per barrel, while gold traded near $1815 per ounce.

Just as the economy moves towards a broader reopening this summer, consumers are faced with the highest gasoline prices in two to three years. So we must take the good with the bad. Driving gas prices is West Texas Intermediate (WTI), which is at $65.68/barrel and just below the recent closing high of $66.09 from March 5. It appears that after a few months of consolidation, crude oil may finally break out of its range.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.